MKT 3110 Test 1

What are likely choices for consumers in

Discretionary income competition —could be literally anything Product competition —land-based phone systems, Internet based phone systems including VOIP, smart phones, tablets with GPS, smart watches with GPS Brand competition — list the brand names of a variety of smart phones or smart watches or any other favorite products

What element of global marketplace disruption does a chapter identify as being so significant that it not only affects business activities, but can create social unrest and even revolution?

Distribution of wealth

The Economic Environment

Marketers need to understand the state of the economy from different perspectives Overall economic health (e.g., GDP, Forex Rate) Level of economic development Current stage of the business cycle The Big Mac Index uses the prices of the Big Mac to compare purchasing power in different countries.

Functional Planning

Functional—Planning done by top functional level management Develop detailed plans for strategies and tactics for the short term, supporting an organization's long-term strategic plan

Distribution Decisions

Getting your product to consumers in a remote location can be quite a challenge. It's essential for a firm to establish a reliable distribution system if it's going to succeed in a foreign market. For example, in least developed countries, marketers may run into problems when they want to package, refrigerate, or store goods for long periods.

Competition in the Macroenvironment

Marketers also need to understand the big picture—the overall structure of their industry. 1. Monopoly 2. Oligopoly Ex: Most cable, car, and airline companies. Few companies hold the majority of the market. Majority in the US. 3. Monopolistic competition 4. Perfect competition Competition within the macroenvironment relates to the overall structure of the industry.

Promotion Decisions

Marketers must also decide whether it's necessary to modify how they speak to consumers in a foreign market. Some firms endorse the idea that the same message will appeal to everyone around the world, while others feel the need to customize it. As you might expect, many marketers at least choose to translate the message into the dominant language, but the prevalence of English world wide does allow marketers the flexibility of running an English language ad globally. However, clever ad executions can avoid the language barrier entirely. During the 2006 World Cup, MasterCard ran ads that appeared in 39 countries, so its ad agency came up with a spot called "Fever," in which 100-odd cheering fans from 30 countries appear. There's no dialogue, so it worked in any language.

Target marketing strategies

Marketers need to understand the attitudes of their customers toward sustainability. What is the potential market for sustainability focused goods and services? What environmentally friendly products will consumers be likely to purchase, and which will they not? Then they can successfully target green customers—those consumers who are most likely to actively look for and buy products that are eco-friendly.

Group of 7 (G7) Countries

France, Germany, Italy, Japan, United Kingdom, Canada, and the United States Russia was a member until 2014 when it was removed because of involvement in Crimean crisis The most economically developed countries in the world, France, Germany, Italy, Japan, the United Kingdom, Canada and the United states form the Group of 7 (G7). The purpose of the G7 is to provide a way for these countries, all democracies with highly developed economies, to deal with major political and economic issues that the international community faces. Recently, the G7 has begun to discuss other issues such as energy, terrorism, unemployment, the information highway, crime and drugs, arms control and the environment.

Functional level planning

Functional level planning is performed by either Vice Presidents or top level functional area managers (VP Sales for many industrial or business-to-business firms; VP of Marketing for many consumer goods firms). Functional planning is also sometimes called tactical planning. Functional planning provides detailed plans for the short term that support the longer strategic plan. Typically, functional planning includes: A broad 3-5 year plan to support the strategic plan. A detailed annual plan. For example, the marketing plan might state as one of its objectives: "to gain a 40% share" of a particular market by means of the introduction of three new products during the coming year (consistent with the firm's product development strategy).

Step 3: Develop Marketing Strategies

Identify target market(s) Adjust marketing mix for each target market - Product - Price - Promotion - Place (Distribution) Marketing mix decisions identify how marketing will accomplish its objectives in the firm's target markets. First, the target market(s) that are best suited to the firm's offering need to be identified. Next, the specific product, price, promotion, and place strategies that fit the market need to be developed.

Standardization

If a standardization strategy is chosen, the same strategy used in the home market is applied in the same way abroad. Proponents of standardization argue that the world has become so small that basic needs and wants are the same everywhere, so why not enjoy economies of scale by spreading the costs of product development and promotional materials across multiple markets?

Consumer protection from unfair practices

If consumers are treated fairly

Licensing Agreement

In a licensing agreement, one firm (the licensor) gives another (the licensee) the right to produce and market its product in a specific country or region in return for royalties on goods sold.

Strategic Alliances

Joint venture with another company from another country. Advantage - partnering with someone else. Strategic alliances allow companies to pool resources for common goals. Joint ventures often allow easier access to new markets.

Business portfolio

Just as we call the collection of different stocks an investor owns a portfolio, the range of different businesses that a large firm operates is its business portfolio. These different businesses usually represent different product lines, each of which operates with its own budget and management. Having a diversified business portfolio reduces the firm's dependence on one product line or one group of customers

Step 4: Establish Business Portfolio

Large firms often operate a range of different businesses (SBUs) that are called its business portfolio. SBUs usually represent different product lines or brands and are a separate profit center. Disney operates multiple lines of business, including movie studios, theme parks, cruises, and so on. Portfolio analysis Assesses the growth potential for a firm's SBU's Guides decisions on allocation of corporate resources to different SBU's BCG Growth-Market Share Matrix is popular Larger firms may need to establish a business portfolio of different product lines or brands. For larger companies with several different SBUs, strategic planning includes making decisions about how to best allocate resources across these businesses (or the business portfolio) to ensure growth for the total organization. These different businesses usually represent very different product lines, each with its own budget and management. Having a diversified business portfolio reduces the firm's dependence on one product line or one group of customers, which can prevent disaster if market conditions in a particular industry change unexpectedly. Travel restrictions and poor economy in 2020 meant that consumers didn't travel as much, making a bad year for Disney theme park attendance and cruises. Disney leaders found that some of the losses were made up by stay-at-homers who watch Disney's TV networks or stream Disney shows and who purchase Mickey Mouse collectibles from the Disney website. Portfolio analysis is a tool used by managers to help assess the potential of a firm's SBUs and whether they should receive more or less of the firm's resources. It also helps determine which SBUs are most consistent with the firm's overall mission.

Strategic Business Units (SBU's)

Large, multiproduct firms may have separate divisions, called strategic business units (SBU's). SBU's operate like a separate business. SBU's have their own missions, objectives, resources, managers, and competitors. Strategic planning is conducted at both the corporate and S B U level.

Developed Countries

Offer wide range of opportunities for international marketers Includes Group of Seven (G7) Developed countries include the United States, United Kingdom, Canada, Australia, France, Italy, Germany and Japan and as such are the most sophisticated markets available offering a variety of lucrative opportunities to global marketers. Collectively, these countries are often referred to as the Group of Eight, or G8 for short. ____________________________________ The terms used here (less developed, developing, and developed) were developed and used by the UN for many years. The UN has very recently changed their country designations to developed economies, economies in transition, and developing economies. In addition, the World Bank changed the classifications of countries by Gross National Income (GNI)/per capita (high, upper-middle, lower-middle, and low). And there are other designations used by some economists that include industrial developed economies, developing economies, less developed countries, least developed countries, emerging markets, transition economies, and frontier economies. We are continuing to use the older UN terms as they still remain in use by many.

The external environmental factors

1. Technological Environment 2. Political or Legal Environment 3. Socio Cultural Environment 4. Competitive Environment 5. Economic Environment

Culture Values

- Cultural values every society has a set of cultural values, or deeply held beliefs about right and wrong ways to live, that it imparts to its members. Differences in values between one country and another often explain why marketing efforts that are a big hit in the United States can flop abroad. For example, One important dimension on which cultures differ is their emphasis on collectivism versus individualism. In collectivist cultures, such as those we find in Venezuela, Pakistan, Taiwan, Greece, and others, people tend to subordinate their personal goals to those of a stable community. In contrast, consumers in individualist cultures, such as the United States, Australia, Great Britain, Canada, and the Netherlands, tend to attach more importance to personal goals than they do to those of the larger community. This difference can be a big deal to marketers who appeal to one extreme or the other—try selling a garment that is "sure to make you stand out" to consumers who would much prefer to "fit in."

Customs

- Customs are related to norms. In the contest of meals, a custom would dictate when dinner should begin (6 pm or 7 pm in the United States vs. 9 pm or later in Europe). Customs can also relate to things such as eye contact, personal space, and whether giving one kiss or two on the cheek is a proper greeting. Marketers who don't know the local customs when working abroad are at a severe disadvantage in transacting businesses.

Consumer Ethnocentrism

- Finally, it's important to understand that ethnocentrism is common. Consumer Ethnocentrism is the tendency to prefer products or people of one's own culture. In many countries, the willingness to try goods made in other countries comes slowly.

Language barriers

- Language barriers can be very problematic, particularly when slogans or brands names are "literally" translated from one language to another. The textbook discussed several examples of poorly translated phrased that misrepresent the intended message. For example, when Coors Brewing Company put its slogan, "Turn it loose" into Spanish; it was read as "Suffer from diarrhea". Thus it's vital for marketers to work with local people who understand the subtleties of language to avoid confusion.

Agile Marketing and the Strategic Market Planning Process

- Many assume the market planning process is neat, orderly and predictable—Not so! - Neat orderly planning could mean the opportunity passes by. - For competitive success, agility, being nimble and able to move quickly and easily, is essential. - Sprint planning (not the phone service) - Daily Scrum Marketing is adopted largely from software development. In that field, agility is usually based on a methodology called Scrum, meaning to embrace the uncertainty and creativity that already governed software development. Scrum advocates that whenever you start a project, you should regularly check in, see if you're heading in the right direction, and verify that it's what people want. Scrum provides a framework that aims to create a culture of transparency, inspection, and adaptation while making it easier for team members to produce consistently great products.

Step 3: Set Organizational or SBU Objectives

- Organizational goals and objectives should be a direct outgrowth of the mission statement. - Taking into account internal and external environmental factors - Objectives should be specific, measureable, attainable, and sustainable over time. - May relate to revenue/sales, profitability, market standing, R O I, productivity, product development, customer satisfaction, social responsibility, and other attributes.

Social norms

- Social norms are specific rules dictating what is right or wrong, acceptable, or unacceptable. Norms flow from values and dictate how people within a country dress, speak, and otherwise behave. For example, beef is taboo in India, while few Americans could even stomach the thought of eating dog meat or horsemeat, food which is common elsewhere abroad.

sociocultural environment

- The sociocultural environment refers to the characteristics of the society, the people who live in that society, and the culture that reflects the values and beliefs of the society. Whether at home or in global markets, marketers need to understand and adapt to the customs, characteristics, and practices of its citizens as these factors affect people's responses to products and promotional messages in any market.

Strategic Planning: Planning done by top level corporate management

1. Define the mission 2. Evaluate the internal and external environment 3. Set organizational or SBU objectives 4. Establish the business portfolio (if applicable) 5. Develop growth strategies

Operational Planning, Planning done by supervisory managers

1. Develop action plans to implement the marketing plan 2. Use marketing metrics to monitor how the plan is working

Levels of Economic Development

1. Least Developed Country (LDC) 2. Developing Countries 3. Developed Countries

Functional or Market Planning, Planning done by top functional-level management such as the firm's chief marketing officer (CMO)

1. Perform a situation analysis 2. Set marketing objectives 3. Develop marketing strategies 4. Implement and control the marketing plan

A firm has three choices when it decides on a product strategy

1. Sell the same product in the new market. 2. Modify it for that market. 3. Develop a brand-new product to sell there.

This Scrum approach lays out steps to achieve these objectives:

1. Sprint planning (Note that in agile marketing, the word sprint, used in place of plan or planning to call out the need for speed in planning and execution of strategies. 2. Daily Scrum (also known as daily standup) 3. Sprint review 4. Sprint retrospective __________________________________________________ How do marketers apply this approach? Basically an organization creates an elite team, kind of like a special forces operation in the military. They are removed from their daily assignments, and instead meet in a "war room" to plot their quick strike. These groups should be small enough that everyone can communicate with one another easily. Jeff Bezos of Amazon specified they should be "two-pizza teams"—that is, teams no bigger than can be fed by two pizzas. A "Scrum master" leads the team, setting priorities and managing "sprints" (one- to two-week cycles of work). The group's mission (should they choose to accept it!) is to execute a series of quick-turnaround experiments designed to create real bottom-line impact. For example, a retailer might want to test a lot of different approaches to optimizing conversion on its website (such as the percentage of people who visit the site and actually buy something). At this point, going much further into explanations of the Scrum process will take us down a scary black hole to techie land. For your purposes as a marketing student, we bring up the concept of agile marketing just to be sure that you understand that market planning isn't always quite as methodical as the process may seem when you read about it. And in hypercompetitive markets in which success depends on speed of marketing strategy development and execution, you may well find yourself in the middle of Scrum as your business aims to stay nimble. Nimble organizations are essential. A nimble organization in business means that a firm has the culture, leadership, and operational capability to change very rapidly as external conditions demand.

Decisions in the domestic market

1. Target market 2. Product decisions 3. Price decisions 4. Promotion decisions 5. Distribution decisions

A code of ethics

A code of ethics is a written standard to which everyone in the organization must subscribe.

Marketing Mix Strategies: Localization versus Standardization

1. To what extent will companies need to adapt marketing communications to the local market? 2. Will the same product appeal to people there? 3. Will it have to be priced differently? 4. How will the company get the product into people's hands? In addition to "big picture" decisions about how a company will operate in other countries, managers must decide how to market their product in each country. They may need to modify the famous Four Ps—product, price, promotion, and place—to suit local conditions. This decision boil down to a choice between following a policy of standardization or localization for the marketing mix strategy.

Decisions in the global market

1. What market or markets to enter 2. Level of commitment 3. How to adapt marketing strategies

Internal Environment

A firm's strengths and weaknesses Technologies/patents Physical facilities Financial stability Supplier relationships Reputation Strong brands Human capital _____________________________ The "internal environment", refers to all controllable elements within the firm that influence how well it performs. These internal aspects represent key strengths and weaknesses. Key controllable elements that can represent strength or weaknesses of the firm include not only human capital or people (skills, training, loyalty) such as in the Southwest Airlines example, but also technologies (patents, processes, machinery, etc.), physical facilities (location, scope, quantity, etc.), financial stability, corporate reputation, quality products, strong brands (brand awareness, image, equity, market share, etc.), and intellectual capital.

Perfect Competition

A market structure in which many sellers, all of whom offer similar products, are unable to have an impact on the quality, price, or supply of a product

Mission Statement

A mission statement is a formal statement in the strategic plan that describes the firm's overall purpose and what it hopes to achieve in terms of its customers, products, and resources. The ideal mission statement is not too... Broad Narrow Shortsighted An ideal mission statement isn't too broad, narrow, or shortsighted. It is unique to a particular firm and describes the purpose of the company and what it wants to achieve in terms of customers, products, and resources.

Monopoly

A monopoly exists when one seller controls a market. Because the seller is "the only game in town," it feels little pressure to keep prices low or to produce quality goods or services. Within the United States, monopolies are limited as they violate antitrust regulations and limit competition. Utility companies that serve a given area are probably the closest example of a monopoly in the United States.

A product adaptation strategy

A product adaptation strategy occurs when a firm offers a similar but modified product in foreign markets.

A straight extension strategy

A straight extension strategy is used when a firm offers the same product in both domestic and foreign markets.

A firm seeking a deep commitment to a foreign market, might choose to enter ________ by forming a joint venture with a domestic firm in the target country.

A strategic alliance

Sustainable Customer Behavior

A sustainability approach doesn't end with an improvement in the manufacturing process. Marketers need to motivate customers. Customers can be a part of sustainable marketing practices. Marketers should motivate customers to seek out, pay for, and use sustainable options. When consumers become knowledgeable about environmental concerns and environmentally friendly products, they become part of sustainable marketing practices.

Set Organizational or SBU Objectives

After they construct a mission statement, top management translates it into organizational or SBU objectives. These goals are a direct outgrowth of the mission statement and broadly identify what the firm hopes to accomplish within the general time frame of the firm's long range business plan. If the firm is big enough to have separate SBUs, each unit will have its own objectives relevant to its operations. To be effective, objectives need to be specific, measurable (so firms can tell whether they've met them or not), attainable, and sustainable. The subject of these objectives can vary. Objectives are often financially focused sales, profit, market share, shareholder wealth, or ROI. Other firms may choose to focus on productivity, innovation and research, customer satisfaction, or social responsibility. To ensure measurability, marketers increasingly try to state objectives in numerical terms such as "Increase corporate profitability by 10%". Objectives should state WHAT the firm wants to accomplish, but NOT HOW it will be done. The HOW is the strategy. For example, there are many ways to increase profitability (cutting costs, introducing new products, etc.); the correct strategy depends on the internal strengths and weaknesses of the firm and the opportunities that the firm has available to them. Organizational or SBU objectives are a direct outgrowth of the mission statement and broadly identify what the firm hopes to accomplish within the general time frame of the firm's long range business plan. If the firm is big enough to have separate SBUs, each unit will have its own objectives relevant to its operations

Standard of Living

An indicator of the average quality and quantity of goods and services consumed in a country. When marketers scout the world for opportunities, it helps if they consider a country's level of economic development to understand the needs of people who live there and the infrastructure conditions with which they must contend. In doing so, they also look at what steps the country is taking to reduce poverty, inequality, and unemployment. Analysts also take into account a country's standard of living, which is an indicator of the average quality and quantity of goods and services a country consumes. Based on these factors, the level of economic development of a particular nation can be determined.

Step 1: Perform a Situation Analysis

Analyze the marketing environment Key external environments for marketers: economic, technological, political and legal, and sociocultural. Build on the company's S W O T analysis with information specific to the marketing plan. What media do customers connect with? What media are competitors using? Previous marketing communications successes. Marketing plans include an analysis of the firm's internal strengths and weaknesses that specifically relate to the marketing function and the external environmental factors which affect marketing planning. For example, the marketing plan could talk specifically about the successes or problems with the advertising efforts and about how competitors are gaining market share by using well designed social media strategies. The various environments impacting marketers are economic, technological, political and legal, and socioeconomic. To examine these environments, companies conduct SWOT analysis. Specifically, firms are looking for elements that create a firm's strengths and weaknesses, opportunities and threats, that will impact the marketing plan.

Dumping

Another unethical and often illegal practice is dumping, in which a company prices its products lower than it offers them at home. This removes excess supply from home markets and keeps prices up there. Taking your product and selling it cheaper somewhere else.

Embargo's

Are quotas that completely prohibit specified goods from entering or leaving a country

Functional and Operational

As previously stated, both functional and operational plans need to be consistent with the corporate or SBU strategic plan, and developed in a manner that furthers the mission and goals of the organization following the growth strategies set forth in the corporate/SBU plan.

Competition at the microenvironment occurs at three different levels

At the broadest level, marketers compete for consumer's discretionary income (the money left over after people have paid for necessities). This level of competition includes ALL possible uses —for example, a consumer might choose to make a larger payment on a credit card, spend discretionary funds buying a new cell phone, eating out at a restaurant, or attending a movie. Product competition: Competition at this level consists of alternate products that satisfy the same consumer's needs/wants. For example, an individual desiring Internet access has the choice of DSL or satellite internet. Brand competition: The most direct form of competition occurs among brands offering similar goods/services (with respect to perceived benefits).

The strategy in which a firm develops a less advanced product to serve the needs of people living in countries without a developed infrastructure.

Backward invention

Bribes

Business people give bribes to speed up required work, secure a contract, or avoid having a contract cancelled. Such payments are a way of life in many countries because many people consider them as natural as giving a waiter a tip for good service.

Bottom Line:

Bottom line: All of us as students of strategic market planning today need to expect and embrace constant change as a fundamental truth. This calls for building in contingency planning that takes into account the market uncertainties and constancy of change in business today. Contingency planning assesses the risk of a variety of possible, mostly external, environmental factors and their potential level of impact on the firm's ability to add value and serve its market through its offerings. That is, what is the likelihood of certain possible future events or circumstances to impact the efficacy of a plan? Based on this, enlightened firms develop and prepare for multiple strategic paths, often referred to as scenarios. Because these firms have thought through these different scenarios in advance, if and when one or more of these potentialities occur, they're in a much better place to strategically pivot and nimbly redirect resources to successfully execute a scenario's strategies. In this high-stakes game, the ability to do this well heavily defines winners and losers. A great example of the need for contingency planning was the way many universities approached the prospects of reopening for the fall 2020 semester. During the summer beforehand, school leaders mapped out multiple scenarios, including opening with all students attending in person, opening with all students engaged through online learning, and a hybrid approach in which students made use of both learning modalities. Regardless of industry, could anyone have fully understood in advance the likelihood, scope, and potential impact of the global pandemic that began in early 2020 on their businesses and prepared in advance accordingly? That's a question for the ages in strategic market planning. But going forward, there's no doubt that one of the many organizational lessons learned from the crisis will be the importance of finding a balance between planning as a process and executing broad organizational agility.

Bottom of Pyramid Markets

Bottom of the Pyramid (B O P) markets present big opportunities and challenges. 4 billion+ consumers, living on less than $2 daily $5 billion+ in collective spending power Effectively serving such markets creates unique challenges to marketing organizations, often resulting in new innovations. For instance, BOP consumers in India and other markets cannot afford large containers of shampoo and other personal care products. As a result companies such as Unilever and Procter and Gamble sell shampoo in one-use sachet packets.

BRICS

Brazil, Russia, India, China, and South Africa 42 percent of world's population 22 to 25 percent of world's GDP The largest of the developing or newly industrialized countries are Brazil, Russia, India, China and South Africa and are referred to as the BRICS countries. Marketers are attracted to these countries because of the number of consumers who are not currently wealthy but are beginning to move toward greater prosperity. These represent exciting market opportunities.

Bribery

Bribery occurs when someone voluntarily offers payment to get an illegal advantage. _____________________________________ Bribery occurs when someone voluntarily offers payment to get an illegal advantage. In many LDCs and developing countries, salaries for mid level people are sadly very low; the economy runs on a system we would call blatant bribery. Some of these "payments" are only petty corruption, and the "favors" are inconsequential, while others may involve high-level government or business officials and can have devastating consequences.

What are the basic values and rules of conduct that guide the employees within an organization?

Business ethics

Business ethics

Business ethics are basic values that guide a firm's behavior. What constitutes ethical behavior is often different for different people. Ethical philosophies guide how people make such decisions. ________________________________ Definition of business ethics are the basic values that guide a firm's behavior. Often a firm develops its own code of ethics.

Business Planning

Business planning is an ongoing process of making decisions that guides the firm in the short term and in the long term. Identifies and builds on a firm's strengths Helps managers make informed decisions in a changing business environment Organization develops objectives and provides a means of charting progress toward goals How we are going to conduct our business over a long period of time Planning is critical to the success of ANY business, no matter how large or how small. Careful planning enables a firm to help customers understand what the firm is and what it has to offer that competitors don't—especially as it decides how to create value for customers, clients, partners, and society at large.

Backward invention

By contrast, backward invention occurs when a firm develops a less advanced product to serve the needs of people living in countries without electricity or other elements of a developed infrastructure.

Changes in the natural environment

Changes including weather events, climate fluctuations, rising sea levels, drought, and extreme high/low temperatures, are sources of disruption that, in the short run, are difficult or impossible to be controlled or changed. These are sources of disruption for agricultural production, infrastructure, supply chains, and populations due to deaths, diseases, and extreme economic loss.

Promotional Decisions

Chevrolet Nova in Spain translated as "it doesn't go". BMW in the United Arab Emirates (National Anthem). Electrolux: "Nothing sucks like an Electrolux"

What philosophy "best serves the community as a whole, not just some members"

Common good

Competition in the Microenvironment

Competition in the Microenvironment involves consumer decision making at three levels. Discretionary income → the money left over after people have paid for necessities Product competition Brand competition → ex: getting a new phone - choosing apple or android

Competitive Environment

Competition in the microenvironment Competition in the macroenvironment

Conglomerates and multinational firms

Conglomerates and multinational firms typically are made up of a number of SBUs or strategic business units. SBUs can be defined as "individual units within the firm that operate like separate businesses with their own mission, business objectives, resources, managers, and competitors." Large firms like the Walt Disney Company usually operate several SBUs. Disney SBUs include theme parks, movie studios, TV networks, and their cruise line. Because each SBU has its own distinct mission and objectives, as well as resources, strategic planning must be undertaken at the SBU unit in order to be meaningful. Firms that are not large enough to have separate SBUs engage in strategic planning at the corporate, or firm level instead.

Should We Go Global?

Consider: Both domestic and global market conditions and opportunities Is there room to grow domestically? If there is no room to go domestically or domestic markets are saturated, then you will expand internationally. Will your competitive advantage succeed against local firms with a home-court advantage Will what make the company successful domestically translate into a new foreign market? _____________________________________ The globalization decision is whether or not a firm can and should actually go global. Leadership in the organization must make this key decision. In examining market conditions, a firm may see that it has saturated the market in its domestic country, and foreign expansion is attractive because it may mean more sales and profits. Similarly, the company must look at opportunities that make sense in foreign countries. Once Starbucks, for example, had locations throughout the United States, in 1996 they expanded overseas, first in Tokyo. Since then, when Starbucks realized global expansion was possible, they now have over 30,000 locations in over 80 countries. If it wants to go global, a firm needs to examine the competitive advantage that makes it successful in its home country. Will this leg up "travel" well to other countries?

Gray market

Costs are important of course, because they influence the ultimate price set for the product. One danger of pricing too high is that competitors will find ways to offer their product at a lower price, even if they do so illegally. Gray market goods are items that are imported without the consent of the trademark holder. While gray market goods are not counterfeit, they may be different from authorized products in warranty coverage and compliance with local regulatory requirements. For example, some of you may have gotten your hands on the International version of the textbook for this course, which is only supposed to be sold outside of the United States. This would be an example of a gray market good.

Countertrade

Countertrade means exchanging goods or services which are paid for, in whole or in part, with other goods or services, rather than with money.

What is the second actionable step a firm must take one considering to go global

Deciding which market(s) to enter

Socio Cultural Environment

Demographics Values Social norms Xenocentrism Ethnocentrism

Demographics

Demographics: Examining statistics that measure observable aspects of the population, including its size, age, gender, ethnicity, income, education, occupation, and family structure is the first step in this process, as it is helpful in predicting the size of markets for many products. The characteristics of a population including per capita GDP, percentage population below the poverty level, unemployment rate, life expectancy, literacy rates, and the percentages of populations in various age groups.

Digital Disruption and Strategic Market Planning

Digital disruption: the effect of digital technologies and digital business models on an organization's value proposition and its position within the market in which it operates. Digital vortex: the movement of industries toward a digital center in which business models, offerings, and value chains are digitized to the maximum extent possible. Q: What can we take from our understanding of digital disruption and the digital vortex? A: Traditional (i.e., traditional stepwise) processes to strategic market planning are pretty well suited to more stable, non-disrupted products and markets (remember the product-market growth matrix earlier in this chapter). Such stable environments can better allow for year-long goals and annual repetitive planning processes. But in more and more sectors today—and AdventHealth's sector is a prime example—that level of stability no longer exists as digital disruption and the digital vortex are rapidly redefining what customers want and expect.

Of the various market-entry strategies, which has the highest level of risk?

Direct Investment

Distribution Strategies

Distribution strategies (the place component) outline when, how, and where the firm will make the product available to targeted customers. Sell directly to the final customer or work through wholesalers and/or retailers? Choosing the right distribution strategy depends on product, pricing, and promotion decisions. Distribution strategies outline whether marketers sell the product directly to the final consumer, or if instead they sell to intermediaries, such as wholesalers and retailers, who in turn sell to the ultimate consumer. Not all retailers are equal in terms of their merchandise quality and image; deciding which types of retailers should carry a firm's products is an important decision. Using the internet as a distribution channel can save a firm money in the case of products or services that can be delivered "virtually". For example, airlines used to pay travel agents a commission to book flights. The introduction of online travel agents such as Expedia contributed to the demise of over 80% of traditional travel agencies, as online vendors charged a drastically lower commission than did traditional agencies.

Diversification strategies

Diversification strategies emphasize both new products and new markets to achieve growth.

Step 4: Implement and Control the Marketing Plan

During the implementation process, firms follow a formal process to determine progress toward meeting their marketing objectives. - Measure actual performance - Activity metrics - Outcome metrics - Compare performance to established objectives or strategies while balancing against sustainability and corporate social responsibility. - ROMI (Return on Marketing Investment) is critical In practice, marketers spend much of their time managing the various elements involved in implementing the marketing plan. This involves exercising control over the plan in terms of both budget expenditures and performance. Each action plan must include as accurate a budget as is possible. This allows management at the functional level to monitor budget expenditures and contact the appropriate operational manager if a particular budget line is exceeded within some specified time period. In addition to monitoring budget expenditures, managers must select the metrics to be measured as part of the formal control process. Actual performance on key objectives is measured in terms of these metrics (such as Return on Marketing Investment, or ROMI) and comparing it to the numerical objectives previously set. Activity metrics measure and track specific activities taken within a firm that are part of different marketing processes. Example: the number of calls a salesperson makes. Outcome metrics measure and track specific events identified as key business outcomes that result from the marketing processes. Example: the number of orders or the dollar amount of orders received from the sales calls. ROMI is just one example of a marketing metric; others include measures such as new customer acquisition cost, customer retention rate, customer turnover rates, perceived product quality, and customer satisfaction. Adjustments are made to plan as needed, if for instance, performance seems to be lagging in comparison to the objective that marketers are trying to reach. How does the implementation and control step actually manifest itself within a marketing plan? One very convenient way is through the inclusion of a series of action plans that support the various marketing objectives and strategies within the plan. Action plans also help ma

Setting a Budget

Each cost element of the action plan should link to a budget item. Increases accountability for all parties involved with implementing the marketing plan. Accuracy in estimating individual action plan expenditures helps overall marketing budget forecasting. Each element of the action plan links to a budget item, assuming there are costs involved in carrying out the plan. If there will be no financial cost to an action plan element, the plan should state this. Forecasting the needed expenditures related to a marketing plan is difficult, but one way to improve accuracy in the budgeting process overall is to ensure estimates for expenditures for the individual action plans that are as accurate as possible. At the overall marketing plan level, managers create a master budget and track it throughout the market planning process. They report variances from the budget to the parties responsible for each budget item.

Easy consumer credit makes people buy things they don't need and can't afford

Easy consumer credit makes people buy things they don't need and can't afford: Many are concerned about businesses such as payday loan and car title loan companies that charge interest rates that can exceed 400 percent annually. Their customers typically are people with limited financial resources and even less knowledge about how to manage their money.

Least Developed Country (LDC)

Economic base is often agricultural Includes bottom of the pyramid (BOP) countries Least developed countries are at the lowest stage of economic development. Standard of living is low, and such countries represent poor choices for firms seeking to market discretionary items and luxury products. Agriculture often forms the basis of the economy. Opportunities for expansion into these types of countries are limited to firms that sell inexpensive goods that are staples (e.g., rice) or otherwise related to necessities (cloth for clothing).

Economic Sanctions

Economic sanctions prohibit trade with another country and cut off access to markets (as the United States has done with several countries, including Cuba, Iran, and North Korea). Although serious in nature, economic sanctions can be lifted over time.

Developing Countries

Economy shifts emphasis from agriculture to industry Includes BRICS countries Brazil, Russia, India, China, South Africa China is classified as this cause of their politics When an economy shifts its emphasis from agriculture to industry, standards of living, education, and the use of technology rise. These countries are developing countries. Currently, developing countries are strong markets for products such as PCs. Marketers also see such countries as the future for products related to skin care and mobile phones. Brazil, Russia, India and China are amongst the largest developing countries, and are commonly referred to as BRIC countries.

Access to education

Education is a win-win for consumers who can find jobs that lead to a better quality of life, for governments who not only gain in tax revenues but also in support of the population, and businesses that have increasing markets for products and an educated workforce.

Perfect Competition

Exists when there are many small sellers, each offering basically the same good or service. In such industries, no single firm has a significant impact on quality, price, or supply. Perfect competition is truly rare. Agricultural markets may be the closest example.

Decisions in the Domestic Market and Decisions in the Global Market

Elements outside the firm that may affect it either positively or negatively must be constantly scanned and monitored by businesses on an ongoing basis as part of their strategic planning process. In particular, marketers seek to identify economic, competitive, technological, legal/political/ethical, and sociocultural trends, because these trends manifest as opportunities or threats to the business. Because these factors are external to the firm, marketers cannot directly control them, but they can respond to them via planning. Five environments, technological, political or legal, sociocultural, competitive, and economic all affecting the following decisions in the domestic and global markets.

The matrix illustrates four scenarios as follows.

Emphasis is on existing products and existing markets, Market penetration strategy, Seek to increase sales of existing products to existing markets. Emphasis is on existing products and new markets, Market development strategy, Introducing existing products to new markets. Emphasis is on new products and existing markets, Product development strategy, Create growth by selling new products in existing markets. Emphasis is on new products and new markets, Diversification strategy, Emphasize both new products and new markets to achieve growth.

Human rights issues may limit foreign countries' business opportunities.

Employ children or prisoners for slave wages Subject workers to unsafe working conditions Human slavery—the biggest human rights problem in the world today

Figure 2.1 Steps in the Decision Process to Enter Global Markets

Entering global markets involves a sequence of decisions. Step 1. "Go" or "no go"—is it in our best interest to focus exclusively on our home market or should we cast our net elsewhere as well? Step 2. If the decision is "go," which global markets are most attractive? Which country or countries offer the greatest opportunity for us? Step 3. What market-entry strategy and thus what level of commitment is best? As we'll see, it's pretty low risk to simply export products to overseas markets, while the commitment and the risk is substantial if the firm decides to build and run manufacturing facilities in other countries (though the payoff may be worth it). Step 4. How do we develop marketing mix strategies in the foreign markets— should we standardize what we do in other countries, or develop a unique localized marketing strategy for each country?

Table 2.5 Market-Entry Strategies (1 of 2)

Evaluating WHICH market-entry strategy is most appropriate for a given country can be difficult, as there are pros and cons with each approach. In addition, firms often rely on assessments of country risk. Country risk is "the threat that a country will become politically or economically unstable." One source of information that can be very helpful is the Country Risk Website, which can be found at www.countryrisk.com/.

Expropriation

Expropriation is when a government or state seizes a foreign-owned asset, normally with some compensation for company owners or individuals (but often not for the full value). While the potential for any of these actions occurring in a global market cannot be predicted with 100% accuracy, it certainly needs to be considered. Firms that have frequent regime changes are particularly worrisome. To keep track of the level of political stability or instability in foreign countries, firms often engage in formal or informal analyses of the potential political risk in various countries, or hire specialized consulting firms to do this for them.

External Environments

External environment consists of factors outside the firm that may positively or negatively impact operations. Largely beyond direct management control, so planning is critical - Economy - Competition - Changing customer needs - Technology trends - Sociocultural trends - Legal/political/ethical trends Elements outside the firm that may affect it either positively or negatively must be constantly scanned and monitored by businesses on an ongoing basis as part of their strategic planning process. In particular, marketers seek to identify economic, competitive, technological, legal/political/ethical, and sociocultural trends, because these trends manifest as opportunities or threats to the business. Because these factors are external to the firm, marketers cannot directly control them, but they can respond to them via planning. Trendwatching.com offers a free monthly trend insight newsletter via monthly emails. Many of the articles posted on this website are of interest to marketers in general, and students can often find current examples that demonstrate the integration of trends, products, and marketing communication campaigns.

Extortion

Extortion occurs when someone in authority extracts payment under duress.

What encourages organizations to pay workers in developing countries an equitable wage instead of a minimum wage?

Fair trade

Figure 3.1 Levels of Business Planning

Figure 3.1 shows planning occurs at three levels: strategic, functional, and operational. The top level is "big picture" stuff, while the bottom level specifies the "nuts-and bolts" actions the firm will need to take to achieve these lofty goals. Planning at the functional and operational levels must be consistent with the mission and objectives of the firm.

Figure 3.2 Steps in Strategic Planning

Figure 3.2 presents the steps in the strategic planning process, which are explained in more detail on the following slides. The steps involved are as follows. Step 1, Define and articulate the Mission, Vision, and Values Step 2, Evaluate the Internal and External Environment Step 3, Set Organizational or S B U Objectives Step 4, Establish the Business Portfolio Step 5, Develop Growth Strategies

Figure 3.4 Product-Market Growth Matrix

Figure 3.4 displays the product-market growth matrix which characterizes different growth strategies according to type of market and type of product.

Take a Bow: Marketing on the Global Stage

Firms face uncertainty in the future of the global marketplace Arguments for a single marketplace -Greenhouse effect -Global warming -Arab Spring -COVID-19 -The war in Ukraine You are part of a global community

The U.S. Generalized System of Preferences (GSP)

Governments and economic communities regulate what products are allowed in the country, what products should be made of, and what claims marketers can make about them. For example, local content rules are a form of protectionism that stipulates a certain proportion of a product must consist of components supplied by industries in the host country or economic community. For example, President Trump has been renegotiating NAFTA rules and regulations with Mexico and Canada. Countries that frequently use local content rules include Argentina, Brazil, China, India, Indonesia, Russia, Saudi Arabia, and the U.S. Some governments and companies actively try to protect human rights by denying business opportunities to countries that mistreat their citizens. (for example, those that use child labor or which pay wages far below local poverty levels). Nike, once the poster child for unsafe labor practices, has spent almost two decades admitting to and correcting its formerly abusive practices with increased wages and factory audits, and is now a company others can learn from and look up to? The 2018 Global Slavery Index reported that over 50 million men, women, and children in 167 countries were victims of modern slavery. These men, women, and children are bought and sold in public markets and forced to work in factories, on fishing boats, in mines, at construction sites, in stores, on farms, or in homes as maids, often without a salary. Many are subjected to beating. Countries with the highest prevalence of human slavery include North Korea, Eritrea, Burundi, the Central African Republic, Afghanistan, Mauritania, South Sudan, Pakistan, Cambodia, and Iran. While some people think it's not our government's place or a business's place to dictate how other countries or firms treat their citizens, establishing work conditions standards for foreign business partners is not only the ethical and socially responsible thing to do, it's also a smart business practice as abuse of foreign labor in the construction of American goods can make for very bad publicity at home.

Fair Competition

Governs business to business relationships

Indicators of overall economic health include

Gross Domestic Product (GDP), which is the total dollar value of goods and services it produces within its borders in a year. The per capita GDP is also important. The foreign exchange rate (forex), which is the price of a nation's currency in terms of another currency. A country's level of economic development describes the broad economic picture. A least developed country is the lowest stage, usually having agriculture as its economic base. A developing country is shifting emphasis from agriculture to industry. Developed countries have sophisticated marketing systems, strong private enterprise, and market potential for many goods and services. The Economist magazine has developed its Big Mac Index based on the theory that with purchasing power parity, the exchange rate would equalize prices for goods and services. For instance, the BMI shows that a McDonald's Big Mac, which costs an average of $4.62 in the United States, would cost nearly $8.00 in Norway, over $5.00 in Brazil, and $2.16 in South Africa.

What is the total value of goods and services a country produces within its borders in a one-year time span?

Gross domestic product

Direct investment

High risk because you are investing your money to buy businesses somewhere else or open your own facilities. Advantage - providing opportunities for others. Direct investment is when a firm expands internationally through ownership. Often when it buys a business in the host country outright Firms that choose to develop an even deeper commitment to a foreign market enter a strategic alliance with one or more domestic firms in the target country. These relationships often take the form of a joint venture in which two or more firms create a new entity to allow the partners to pool their resources for common goals. Direct investment: An even deeper level of commitment occurs when a firm expands internationally through ownership, often when it buys a business in the host country outright. Instead of starting from scratch in its quest to become multinational, buying part or all of a domestic firm allows a foreign firm to take advantage of a domestic company's political savvy and market position in the host country.

Oligopolies

In an oligopoly, there are a relatively small number of sellers, each holding substantial market share, in a market with many buyers. Because there are few sellers, the actions of each directly affect the others. Airline industries would be an example.

Localization

In contrast, those in favor of localization feel that the world is not that small; you need to tailor products and promotional messages to local environments. These marketers feel that each culture is unique, with a distinctive set of behavioral and personality characteristics. Once the basic strategy of standardization or localization is chosen, it's time to tweak the marketing mix.

Distribution of wealth

In countries where the wealth is held by a small percentage of the population and there is limited or no chance for rising above the current status, consumers feel hopeless and oppressed. History shows that this disruption not only limits growth opportunities for businesses but also may create unrest and even revolution.

Governments

In countries which have corrupt and\or inept government officials, the opportunities for consumers, for local and foreign investment, and for an advancing society may not be possible. In addition, global news of citizen protests, violence, and general unrest can damage leading industries, such as tourism, thus creating hardships for all.

Figure 3.5 Steps in Market Planning

In functional planning including marketing planning, a first step is to perform a situation analysis which builds on the strategic plan's situation analysis. Each of the steps are explained in the following slides. The steps involved are as follows. Step 1, Perform a Situation Analysis Step 2, Set Marketing Objectives Step 3, Develop Marketing Strategies Step 4, Implement and Control the Marketing Plan

Operational Planning

In marketing, done by people such as sales managers, marketing communication managers, brand managers, market research managers. Focus on day-to-day execution of functional plans. For marketers, this typically includes annual, semi-annual, or even quarterly action plans to guide marketing plan implementation. Use of marketing metrics to monitor performance. Operational planning flows from the marketing plan, and is further developed by supervisory managers who might be product or brand managers, advertising managers, sales managers for particular products, divisions, or geographic territories, publicists, specialists in marketing research, etc. These first-line managers focus on day-to-day execution of functional plans which requires detailed annual, semiannual, or quarterly plan. Example: an objective may be set in terms of units of a product a particular salesperson needs to sell per month (sales quota)

Public Health

Includes not only quality healthcare availability but also health-related consumer behavior, government regulation, conflict, and religious beliefs.

Economic Environment

Indicators of economic health Levels of economic development Business cycle

Overall Economic Health and Standard of Living

Indicators of economic health: 1. Gross Domestic Product (GDP) 2. Foreign Exchange Rates (Forex) 3. Economic Infrastructure

Action Plans

Individual support plans included in a marketing plan that provide guidance for implementation and control of the various marketing strategies within the plan. Sometimes referred to as marketing programs Managers create separate actions plans for each important element involved in implementing the marketing strategy. Marketing planning includes inclusion of a series of action plans that support the various marketing objectives and strategies within the plan. Action plans are sometimes referred to as "marketing programs." The best way to use action plans is to include a separate action plan for each important element involved in implementing the marketing plan.

Infrastructure

Infrastructure includes the physical, organizational, and digital structure needed for a society to successfully function. In today's world this includes not only roads, bridges, and power grids but also Wi-Fi towers, high-quality Internet services, and closed-circuit security cameras.

Franchising

Is a form of licensing that gives the franchisee the right to adopt an entire way of doing business in the host country. Again, there is a risk to the parent company if the franchisee does not use the same-quality ingredients or procedures, so firms monitor these operations carefully. EX: McDonald's in India

Return on Marketing Investment (ROMI):

Is a key marketing metric that is often incorporated into marketing objectives. The word "investment" is highlighted in this definition as it implies that marketers must think of marketing as an investment to accomplish goals, rather than simply as one of many expenses which provide little benefit/return to the firm. Although ROMI is a commonly used metric, there are several major objections to relying exclusively on ROMI: 1. Marketing expenditures aren't treated as an investment in the firm's accounting statements, but rather as a cost, which perpetuates the "marketing is an expense" mentality. 2. Calculating ROMI requires that profit be divided by the expenditure, yet all other bottom-line performance measures consider profit or cash flow after deducting expenses. 3. Calculating ROMI requires knowing what would have happened if marketing expenditures had never taken place, a virtual impossibility. 4. ROMI has become a fashionable term for marketing productivity in general, yet firms often calculate ROMI quite differently, which can cause confusion. 5. ROMI ignores the effect of marketing assets of the firm such as brand equity (which is chiefly built via advertising), and tends to lead managers toward more short-term decision perspectives that focus on short-term incremental profits and expenses without looking at the longer-term effects of any change in brand equity. 6. ROMI often leads to actions by management that are detrimental to the firm's sustainability commitment, because it encourages management to shore up short-term performance instead. ROMI can be used properly if a firm uses an appropriate and consistent measurement process and combines the use of this metric with other critical marketing metrics, such as marketing payback (how quickly marketing costs are recovered). For an organization to use ROMI properly it must: (a) identify the most appropriate and consistent measure to apply; (b) combine review of ROMI with other critical marketing metrics (one example is marketing payback—how quickly marketing costs are recovered); and (c) fully consider the potential long-term impact of the actions ROMI drives (that is, their sustainability).

A developing country is one that

Is shifting its culture from agriculture to industry

Contractual Agreements

Licensing someone else to use your product. Medium risk and control. They could perhaps be intellectual stealing (stealing products and ideas).

SWOT Analysis

Managers often synthesize environmental analysis into a format known as SWOT analysis. SWOT analysis catalogs firms' Internal strengths and weaknesses and External opportunities and threats. The environmental analysis undertaken by a firm is typically summarized in what has come to be known as a SWOT analysis. SWOT is simply an acronym that stands for strengths, weaknesses, opportunities, and threats. Chapter 3 is devoted to an in-depth exploration of the environmental analysis portion of SWOT, in which opportunities and threats are identified.

Sustainability: Marketers Do Well by Doing Good

Many believe sustainability is no longer an option. Firms must focus on the triple bottom line. Sustainability is often a sensible business.

Price strategies

Many consumers would like to buy green products, but they don't because the price is higher than comparable traditional products. Sustainable marketing practices aim to establish prices for green products that are the same or close to the prices of other products.

Market development strategies

Market development strategies introduce existing products to new markets. This strategy can mean expanding into a new geographic area, or it may mean reaching new customer segments within an existing geographic market.

Market penetration strategies

Market penetration strategies seek to increase sales of existing products to existing markets such as current users, nonusers, and users of competing brands within a market. For example, both Quaker Oatmeal and General Mills' Cheerios (also an oats product) have been aggressively advertising a new use for their products as products that can help lower total cholesterol and help keep arteries clean and healthy.

Functional/Tactical Planning

Market planning includes: Situation analysis Broad three-to-five-year plan to support the strategic plan Detailed annual plan for the coming year

Creating Action Plan Timelines

Marketers often create Gantt charts showing the timeline of the activities. Create a Timeline - Each action plan requires a timeline to accomplish the various tasks it requires. This is essential to include in the overall marketing plan. Most marketing plans portray the timing of tasks in flowchart form so that it is easy to visualize when the pieces of the plan will come together. Marketers often use Gantt charts or PERT charts, popular in operations management, to portray a plan's timeline.

You need in a company:

Marketing R&D Accounting/Finance HR Operations Distribution IT

Ethics Is Job One in Marketing Planning

Marketing action cannot establish long-term relationships if it is shown to be unethical. - Consequences of low ethical standards can be damaging to firms and managers. - Stockholders may lose investment. - Jobs may be lost. - Confidence in the economy suffers. Businesses touch many stakeholders and need to do what's best for all of them where possible. However, sometimes the interests of various stakeholders and the firm may not align. This can lead to unethical behavior on the part of marketers and other firm employees. For example, Wal-Mart was the target of a US DOJ investigation that alleged the company bribes Mexican officials in order to open more stores. GlaxoSmithKline pled guilty to the promotion of drugs for unapproved uses, failure to report safety data, and improper marketing. OxyContin is an opioid painkiller introduced to the U.S. by Purdue in 1996 as a 12-hour timed-release dosage of oxycodone. The Sackler-family-owned Purdue Pharma, maker of OxyContin, used unethical marketing practices. Such practices led Purdue to become the major contributor to the opioid crisis that caused the deaths of 400,000 individuals. Purdue's aggressive marketing of OxyContin included visiting doctors, providing gifts, travel, meals, and funding pain treatment groups while the company's marketing messages minimized the potential for OxyContin to lead to addiction. In 2010, Purdue changed the OxyContin formulation to one that could not be turned into a powder and thus not be easily snorted or injected. This caused many misusers to turn to heroin, which led to an increase in heroin overdose deaths. Purdue announced in September 2019 that it had filed bankruptcy and agreed to pay $10 billion to address the opioid crisis.

Market Planning: Develop and Execute Marketing Strategy

Marketing and other functional managers develop functional plans to achieve objectives. Effective implementation of the four Ps requires a great deal of planning. Steps are similar to those in strategic planning Key difference relates to focus on issues relating to marketing mix.

Deciding on Measurements and Controls

Marketing control is a formal process for: - Measuring performance - Comparing performance to established marketing and strategy objectives - Making adjustments to the objectives or strategies based on this analysis Selecting the right metrics should account for short-term objectives balanced against a firm's long-term sustainability. Metrics can serve as leading indicators or lagging indicators. The concept of control as a formal process of monitoring progress to measure actual performance, compare the performance to the established marketing objectives or strategies, and make adjustments to the objectives or strategies on the basis of this analysis. The metric(s) a marketer uses to monitor and control individual action plans ultimately forms the overall control process for the marketing plan. Many marketers do not consistently do a good job of measurement and control, which, of course, compromises their market planning. Selecting good metrics needs to take into account short-term objectives balanced against the firm's focus on long-term sustainability. Leading indicators are indicators that represent the performance of current efforts allowing marketers to adjust relevant activities resulting in performance improvements. Lagging indicators are performance indicators that represent the performance of an action plan based on outcomes realized.

Marketing creates interest in products that pollute the environment

Marketing creates interest in products that pollute the environment: Yes, it is true that those gas-guzzling SUVs remain on the market and that commercial fertilizers, pesticides, and insecticides continue to pollute the environment as farmers try to produce more and better food. Many would argue, however, that those chemicals would not be available unless there were a demand for them. Moreover, use of these chemicals increases crop yields and helps in reducing global hunger.

Is Marketing Unethical?

Marketing serves the rich and exploits the poor. Products are not safe Poor quality products Planned obsolescence Easy consumer credit makes people buy things they don't need or can't afford.

Marketing serves the rich and exploits the poor

Marketing serves the rich and exploits the poor: Many marketers are concerned about their bottom line, but they also want to provide a better quality of life for all consumers, that is, the societal marketing concept. But there are exceptions. For example, because of decreasing sales of cigarettes in developed countries, tobacco companies target smokers in LDCs and developing countries and thus contribute to the health problems of those populations.

Step 1: Define the Mission, Vision, and Values

Mission statements for both the corporation and each SBU Key questions in determining mission (or purpose) What business are we in? What do we believe in as an organization? What customers should we serve? How should we develop the firm's capabilities and focus its efforts? Management's FIRST step in strategic planning is to create a mission statement (if the firm is new) or review the firm's mission statement in light of market conditions if a mission statement already exists. In doing so, upper management seeks to answer the three questions shown on the slide. While mission statements are not meant to change on an annual basis, businesses must be open to changing their mission as consumers' needs change and markets evolve. Based on the answer to the key questions shown, the firm creates or revises the mission statement, or "a formal document that describes the firm's overall purpose and what it hopes to achieve in terms of its customers, products, and resources." Ideally, the mission statement shouldn't be too broad or too narrow. A mission statement that is too narrow may inhibit managers' ability to visualize possible growth opportunities. If, for example, a firm sees itself in terms of its product only, consumer trends or technology can make that product obsolete—and the firm is left with no future. Smart firms make their mission statements very visible to customers and other stakeholders as a way to trumpet the good work they do.

Monopolistic competition

Monopolistic competition occurs when there are many sellers who compete for buyers in a market. Each firm, however, offers a slightly different product, and each has only a small share of the market. This form of competition probably best characterizes the overall structure that competition takes within the United States.

Political or Legal Environment

National laws of commerce International regulations Regional agreements Political stability Regulatory issues Human rights issues

Nationalization

Nationalization occurs when a government or state seizes a ​business enterprise, natural resource, or ​other asset and justifies this action as being in the best interest of the country or state. Reimbursement is typically not required.

Operational Planning for Marketing

Operational plans focus on day-to-day execution of the marketing plan. - Cover a shorter period of time than strategic and functional plans - By first-line managers, for example, sales, digital marketing, marketing research, and so on. - Include detailed instructions for activities, specifies responsibilities, and provides timelines - Many key marketing metrics actually are used at the operational level of planning. Operational planning is all about making sure the plans get carried out. A shorter period of time—perhaps one or two months Many of the important metrics get used in the operational planning level, e.g., number of new customers, sales calls per month, customer turnover, and customer loyalty. These metrics are captured at the operational level and then sent to upper management for future planning at the functional and/or strategic level(s).

Brand You: Finding the Right Fit (Organizational Culture)

Organizational Culture - The location of the business. - The personality of key players. - The management philosophy and style. - Risk-taking. - Ethics. - Social responsibility Differences among Industries - Recognize each industry has a different culture. Landing a Job Overseas

Control/Metrics

Outcome Metric 30% of calls results in sales Actionable/Activities Metric Number of calls you have (100 calls per week)

Outsourcing

Outsourcing is the business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by the company's own employees and staff.

Product Adaptation and Localization Strategy

P&G removing softeners from Tide for the Indian market. GM changing cars' dimensions to suit the European market. Changing menus to fit within the cultural values of a foreign market; Mango doughnuts in Thailand, and Kimchi-stuffed savory doughnuts in China.

Planned obsolescence

Planned obsolescence: In order to remain profitable, marketers must offer new products after an existing product has been on the market for a period of time. For example, just when we all decided we had to trade in our old HCD TV for an LED smart TV, the OLED (organic light-emitting diode) TVs are hitting the market at prices beginning around $5,000. For many people, this is a good thing, as it increases their enjoyment of TV.

Business Planning: Compose the Big Picture

Planning is everything ... almost!

Political Constraints on Trade

Political actions of a government may constrain business - Economic Sanctions - Nationalization - the government takes over and kicks the business out. They claim the business and get paid nothing - Expropriation - the government pays you cents on the dollar after kicking you out Political actions of a government often constrain business. For example, invasions, wars, and even actions such as a newspaper printing cartoons that highly offend those of a certain nationality or religion can trigger retaliatory action around the globe. In such times, it's common for symbols of the offending country's culture, like McDonald's Golden Arches for the United States, to be the first target of boycotts, demonstrations, vandalism, and in some cases destruction. Beyond these types of actions or of course a declaration of war, commonly imposed constraints include economic sanctions, nationalization, and expropriation.

Poor-quality products

Poor-quality products: Many people bemoan the loss of U.S. manufacturing, feeling that imported products such as textiles and furniture are of poor quality. Product quality, however, is determined by what consumers want in a product. Do you want a refrigerator that lasts 50 years?

Product strategies

Sustainable product strategies include the production of more environmentally friendly products, such as electric automobiles, and the use of environmentally friendly and recycled materials in products and in packaging. Long-term sustainability requires that marketers also understand how consumers use, store, and dispose of products.

Pricing Strategies

Pricing strategy determines how much a firm charges for a product including sales to wholesalers, retailers, and the MSRP (manufacturer's suggested retail price) charged to consumers. A firm may base its pricing strategy on costs, demand, price of competing products. Debundling _________________________________ Pricing Strategies: determine how much a firm's charges for a product. Setting a price is not an easy task - one must consider cost and competitive factors, the price consumers are willing to pay, and the ability of wholesalers and retailers to markup the product and earn a fair profit. Typically marketers set the price to wholesalers, or if wholesalers are not used, retailers, and suggest a retail price which may or may not be adopted at the point of sale. Sometimes the firm bases its pricing strategy solely on cost, demand, or competitive issues.

Step 2: Evaluate the Internal and External Environment

Process referred to as a situation analysis or an environmental analysis. Internal environment: the controllable elements inside a firm. External environment: elements outside the firm that may affect it. The second step in strategic planning is to assess the firm's internal and external environments. We refer to this process as a situation analysis, environmental analysis, or sometimes as a business review. Regardless of the name used, this process is critically important as it allows planners to better understand the strengths and weaknesses that are inherent to the firm, as well as key trends or factors that represent opportunities or threats to the firm or its products/services. SWOT analysis is a popular approach to presenting environmental analysis, formally defining the firm's internal strengths and weaknesses as well as trends in the external environment that either favor firm strengths (resource advantages) or exacerbate firm weaknesses (resource deficits). Some experts believe you should build your SWOT after you have a complete understanding of your internal and external environments. Others recommend that you develop a list of your strengths, weaknesses, opportunities and threats and then describe evidence of these. There are benefits with both methods and there are also disadvantages. What is important is that you carefully examine the environment.

What product strategy involves offering similar, but modified products in a foreign market?

Product adaptation

Marketing Mix Strategies: To "P" or Not to "P?"

Product decisions - Straight extension - Product adaptation - Product invention - Backward invention Once a firm establishes whether it will adopt a standardization or localization strategy, it can then plan for the four Ps.

Product development strategies

Product development strategies create growth by selling new products in existing markets. Product development may mean extending the firm's product line by developing new variations of the item (new flavors, sizes, packages), or it may mean altering or improving the product to provide enhanced performance (adding features such as vitamins or subtracting features such as fat).

Product Strategies

Product strategies essential to achieving marketing objectives. - Product design - Packaging - Branding - Support services and maintenance - Upgrades - Product variations Product strategies include a variety of factors. Certainly a major consideration relates to the nature of the product - its key benefits and attributes. But product strategies also include considerations related to packaging (colors, sizes, materials uses, information included), branding, support services (maintenances, upgrade opportunities, FAQs on websites, etc.), and product variations (flavors, quantities, variations, e.g., Diet vs. Non-Diet).

Products are not safe:

Products are not safe: Whether marketers are truly dedicated to providing their customers with the safest products possible or because of the fear of government regulation and liability issues, most firms do make safe products and, if they find a problem, quickly notify customers and recall the defective product. GM, however, in 2014 found itself embroiled in a huge scandal after choosing in 2005 not to recall 2.6 million cars with ignition switches that were known to be faulty. Instead, GM continued to use the switches, which could cut off power to the engine, disabling the airbags and power steering and brakes. The faulty switches were linked to at least 13 deaths.

Promotional Strategies

Promotional strategy is how marketers communicate a product's value proposition to the target market. - Advertising - Sales promotion - Public relations - Direct marketing - Personal selling - Social media and digital communications A promotional strategy is how marketers communicate a product's value proposition to the target market. Marketers use promotion strategies to develop the product's message and the integrated communications mix of advertising, sales promotion, publicity, direct marketing, personal selling, and new communications practices such as social media marketing that will deliver the message. As previously discussed, the marketing mix strategy must be devised with the intent of achieving marketing objectives, which in turn, contribute towards the achievement of corporate or SBU objectives.

The Unitarian approach advocates the decision that

Provides the most good and the least harm

Economic Infrastructure

Quality of country's distribution, financial, and communications systems

Which business cycle indicates falling demand, employment, and income?

Recession

Socio Cultural Environment:

Refers to characteristics of a society, its people, and its cultural values and beliefs - Demographics - Cultural Values - Social norms - Language Consumer Xenocentrism Think other people make better products than you do. Consumer Ethnocentrism People care about their own product. Here is more superior, buy American.

Regulatory Constraints on Trade

Regulatory constraints on trade restrict the marketing Local content rules

Return on Marketing Investment (ROMI)

Return on marketing investment Revenue (or profit) generated by investment in a given marketing program divided by the cost of the program at a given level of risk For instance, if: Revenue from Marketing Investment = $150,000 Cost of Marketing Program = $30,000 ROMI = 5.0

In the approach that describes a decision that does the best job of protecting the moral rights of all affected

Rights

Exporting and Export Merchants

Should the company sell products on its own or rely on local business partners? Export merchants are intermediaries a firm uses to represent it in other countries. Understand local market, know prospective buyers, and may be better able to negotiate terms Exporting: If a firm chooses to export, it must decide whether it will attempt to sell its products on its own or rely on intermediaries to represent it in the target country. These specialists, or export merchants, understand the local market and can find buyers and negotiate terms. The advantages and disadvantages of exporting and other strategies are displayed on the slide. Many consumers want familiar products that are produced in foreign countries.

Step 5: Develop Growth Strategies

Small and medium-sized firms with only one business and individual SBUs develop growth strategies. Product-market growth matrix - Analyzes growth strategy potential for new and existing markets and products. - Market penetration - Market development - Product development - Diversification A major part of strategic planning moves beyond portfolio analysis and focuses on the evaluation of growth strategies. Growth strategies are used to in the strategic planning of small and medium-sized businesses and in individual SBUs. The product-market growth matrix allows marketers to classify opportunities for growth in terms of whether they occur in existing or new markets, and whether they would be best served by putting their resources into existing products, or acquiring new products. For example, the product development strategy followed by Jeep has resulted in new vehicles being introduced to the consumer market. The product-market growth matrix classification scheme results in four potential growth strategies.

Disruption in the Global Marketplace

Sources of disruption Distribution of wealth Access to education Infrastructure Governments Public health Demographics Changes in the natural environment Media and telecommunications

Social Norms

Specific rules that dictate what is right or wrong, acceptable or unacceptable

Step 2: Set Marketing Objectives

Specific to the firm's marketing mix-related elements Marketing objectives help achieve the overall business objectives. Marketing objectives are focused on marketing-mix activities. Overall business objectives involve many aspects of the firm - not just marketing. Generally, marketing objectives are more specific to the firm's marketing mix-related elements. Think of the connection between business objectives and marketing objectives this way: Business objectives guide the entire firm's operations, whereas marketing objectives state what the marketing function must accomplish if the firm is ultimately to achieve these overall business objectives. Therefore, when setting marketing objectives, firms attempt to craft objectives that help achieve the business' overall objectives.

The BCG growth-market share matrix is divided into four quadrants.

Stars are SBUs with products that have dominant market shares in high-growth markets. Stars generate large revenues, but they also require large amounts of funding to keep up with production and promotion demands. Hence, stars need investment capital from other parts of the business because they don't generate it themselves. Cash cows have dominant market shares in low-growth potential markets. Because there's not much opportunity for new companies, competitors don't often enter the market and the firm enjoys a high market share that it can sustain with minimal funding. Firms usually milk cash cows for their profits to fund the growth of other SBUs. Of course, if the firm's objective is to increase revenues, having too many cash cows with little or no growth potential can become a liability. Question marks—sometimes called problem children—are SBUs with low market shares in fast-growth markets. When a business unit is a question mark, the key issue is whether through investment and new strategy it can be transformed into a star. But the problem with question marks is that—despite investment—many times they make a beeline straight into the annals of market failures. Dogs command small shares of slow-growth markets. They are businesses that offer specialized products in limited markets that are not likely to grow quickly. When possible, large firms may sell off their dogs to smaller firms that may be able to nurture them—or they may take the SBU's products off the market. Disney, being a savvy strategic planner, over a decade ago apparently identified its Miramax film studio as a long-term dog because they sold it off after a 17-year involvement with that studio.

A flow chart from top to bottom shows a sequence of decisions which are as follows

Step 1: Whether to Go Global Step 2: Which Market or markets to Enter Step 3: Level of Commitment Step 4: How to Adapt Marketing Mix Strategies. Localize. Standardize.

A relationship developed between a firm seeking a deeper commitment to foreign market and a domestic firm in the target in country

Strategic alliance

Place/distribution strategies

Sustainable distribution strategies can include retailers who focus on a reduction in the use of energy in order to benefit from both monetary savings and the loyalty of green consumers. Both producers and retailers can choose to buy from nearby suppliers to reduce dependence on long-haul trucking, which is a major source of air pollution.

Strategic Planning

Strategic planning is the managerial process that matches a firm's resources and capabilities to market opportunities for long-term growth. Top management defines firm's purpose and specifies what the firm hopes to achieve All organizations, large and small, need strategic plans. Many large firms have separate strategic business units (S B U's); each S B U also needs its own strategic plan. Planning done at the strategic level is long range (3-5 years). The mission, objectives, business portfolio, and growth strategy decisions set at this level "set the stage" and FLOW THROUGH to the functional and operational planning levels. For example, a firm's strategic plan may set an objective to increase total revenues by 20 percent in the next five years. SBUs are individual lines of business within large firms that are unique and large enough to justify having their own mission, business objectives, resources, managers, competitors, etc. For instance, Disney has separate SBUs for its theme parks, TV networks, film studios, and cruise lines.

Strategic Planning: Frame the Picture

Strategic planning plays an important role in the modern corporation. Optimize revenues across multiple lines of business. Minimize risk in a complex and changing global environment. Includes a series of steps that results in development of growth strategies.

All Business Planning Is an Integrated Activity

Strategic, functional, and operational plans must be in harmony for firms to succeed. Planning at all levels flows from organizational mission and objectives. Planners at all levels must keep the "big picture" in mind.

SWOT Analysis External and Internal

Strengths and Weaknesses are INTERNAL Opportunities and Threats are EXTERNAL

Table 3.1 Action Plan Template

Table 3.1 provides a template for creating an action plan. The marketing plan should include a series of action plans for the various marketing objectives and strategies within the plan. Think about the use of action plans to support this objective for AdventHealth: "To increase patient usage of a particular service by 20 percent in the first quarter of the year." Considering the size of this objective, there would have to be several different action plans to fulfill the objective. There certainly would have to be an action plan for finding out the information necessary to show a customer (patient) need analysis. A separate action plan might be needed to identify and obtain approval of what service or services should be targeted. There would certainly be an action plan for physical facilities changes needed. An action plan for communication If additional monies are needed, there might be a plan for funding the process The best way to learn about an action plan is develop one. Either as an out-of-class assignment or an in-class discussion, you might ask groups of students to develop the skeleton of an action plan for one of those listed as needed—or a different action plan. Each of these action plans would identify the goal, activities, responsibilities, timeline, budget, and measurement and control of a single aspect of the objective.

Developing a Sustainable Marketing Mix

Target marketing strategies Green customers Product strategies Fair trade suppliers Price strategies Place/Distribution strategies Locavorism Promotion strategies

Figure 3.3 BCG Growth-Market Share Matrix

The BCG Growth-Market Share matrix is one of the most commonly used forms of portfolio analysis. Developed by the Boston Consulting Group, the BCG Matrix focuses on the potential of a firm's existing successful SBUs to generate cash that the firm can use to invest in other businesses and to aid management in financial resource allocation. It does this by classifying the various SBUs into one of four categories based on the SBUs market growth rate and relative market share.

The Foreign Corrupt Practices Act of 1977 (FCPA)

The Foreign Corrupt Practices Act of 1977 (FCPA), however, puts U.S. businesses at a disadvantage because it bars them from paying bribes to sell overseas. The FCPA does, however, allow payments for "routine governmental action . . . such as obtaining permits, licenses, or other official documents; processing governmental papers, such as visas and work orders; [and] providing police protection." But the FCPA does not permit payment to influence "any decision by a foreign official to award new business or to continue business with a particular party."

U.S. Generalized System of Preferences (GSP)

The U.S. Generalized System of Preferences (GSP) is a program Congress established to promote economic growth in the developing world. GSP regulations allow developing countries to export goods duty-free to the United States. The catch is that each country must consistently demonstrate that it is making progress toward improving the rights of its workers.

The Business Cycle

The business cycle describes the overall pattern of changes or fluctuations in an economy. Product (design and quality) and price can be affected by the business cycle. - Prosperity - Recession - Recovery - Depression: a serious recession - Inflation The business cycle describes the overall pattern of changes or fluctuations of an economy. All economies go through cycles of prosperity (high levels of demand, employment, and income), recession (falling demand, employment, and income), and recovery (gradual improvement in production, lowering unemployment, and increasing income). A severe recession is a depression, a period during which prices fall but there is little demand because few people have money to spend and many are out of work. Inflation occurs when prices and the cost of living rise while money loses its purchasing power because the cost of goods escalates. The business cycle is especially important to marketers because of its effect on customer purchase behavior. During times of prosperity, consumers buy more goods and services. Not all products and services suffer during a recession. The text describes how consumers "traded down" during the recession of 2008. Identify some other instances where people might opt for less expensive alternatives (e.g., fixing a car, or buying a used vehicle rather than a new car).

Are You a Planner?

The business planning process is very complicated. you develop (write) plans for the entire organization, for functional areas, for five years, for one year, for shorter periods, and on and on. In your everyday life, are you a planner? Do you make short-term and long-term plans? Do you write your planning down in lists? By the day? Week? Semester? Year? How does your planning improve your life? How is your planning like and different from business planning?

Why might a firm decide it's time to globalize a business?

The domestic market has peaked

External Environment

The external environment consists of elements outside the firm that may affect it either positively or negatively. The key elements of the external environment are the economic environment, competitive environment, technological environment, political and legal environments, and the sociological environment. Because managers can't directly control these external factors, they must be aware and respond to them in marketing planning.

World Trade

The flow of goods and services among different countries-the value of all exports and imports of the worlds nations

Media and telecommunications

The many different ways in which individuals share information and learn about the world, including social networks, news organizations, digital platforms, video streaming services, and 5G.

Market growth rate

The market growth rate is meant to provide an estimate of market attractiveness, in terms of the annual growth rate, while the relative market share serves is an estimate of company strength in the market, measured by calculating the SBU's market share relative to its' largest competitor. Thus a relative share of 0.1 would mean that the SBU has only 1/10th of the share of its largest competitor (falling into the low relative market share cell), while a relative share of 2 would indicate that SBU is the market leader, with twice the market share of its largest competitor.

Promotion strategies

The most obvious sustainable promotion strategies are those that inform customers of the firm's commitment to the planet and future generations through advertising and other messages. But there are other opportunities. The cost of creating a TV commercial is enormous and may take two or three days of shooting to complete. Some firms have begun to "reuse" old commercials while letting customers know that this is their way of practicing sustainability.

Contractual Agreements:

The next level of commitment a firm can make to a foreign market is a contractual agreement with a company in that country to conduct some or all of its business there. Two of the most common forms of contractual agreements are licensing and franchising

Political and Legal Environment

The political and legal environment refers to the local, state, national, and global laws and regulations that affect businesses. Legal and regulatory controls can be prime motivators for many business decisions, because they often limit the actions that marketers or businesses are allowed to undertake. Global marketers must understand more complex political issues that can affect how they are allowed to do business around the world. However, some American laws such as the Foreign Corrupt Practices Act also restrict business actions of American firms in the global market. For example, a primary provision of the Foreign Corrupt Practices Act is the prohibition of bribery to sell overseas, REGARDLESS of whether or not bribery is a common and accepted practice in a given country. The purpose of American law is two-fold, as shown on this slide. Some laws, such as the Sherman Antitrust Act and the Wheeler-Lea Act, make sure that businesses compete fairly with each other. Others, such as the Food and Drug Act and the Consumer Products Safety Commission Act, protect consumers by making certain that they are not taken advantage of by businesses.

Foreign Exchange Rates (Forex)

The price of a nation's currency in terms of another currency. The Economist magazine has developed its Big Mac Index based on the theory that with purchasing power parity, the exchange rate would equalize prices for goods and services across countries.

Competitive Intelligence

The process of gathering and analyzing publicly available information about rivals. Competition in the micro and macro environments A second important element of a firm's external environment is the competitive environment. We differentiate between the competitive micro - and macro-environments. For products ranging from toothpaste to sport utility vehicles, firms must keep abreast of what the competition is doing so they can develop new product features, new pricing schedules, or new advertising to maintain or gain market share. Like players in a global chess game, marketing managers size up their competitors according to their strengths and weaknesses, monitor their marketing strategies, and try to predict their next moves. To do this, an increasing number of firms around the globe engage in competitive intelligence (CI) activities where they gather and analyze publicly available information about rivals from such sources as the Internet, the news media, and publicly available government documents, such as building permits and patents.

Product Invention

The product invention variation requires a firm to develop a new product for foreign markets.

Technological Environment

The technological environment profoundly affects marketing activities and can provide firms with an important competitive advantage. Of course, the Internet and continuing innovations in Internet applications is the biggest technological change in marketing. For example, it has affected distribution by allowing some firms to sell directly while reaching a much larger market. It has also created an entirely new venue for marketing communications, including email, banner ads, web sites, social networking. Technology can transform industries making existing products obsolete. Think about the music industry as an example —your parents listened to vinyl records and eight track tapes, technologies which have been replaced now by digital formats. A current, game-changing innovation is the self-driving, driverless, or autonomous vehicle, that is, automobiles, delivery vans and now tractor-trailers without a human at the wheel. Think about the industries that would be impacted when it becomes a reality. When firms develop a new process or implement a new technology in the creation of a product, they typically apply for a patent as a means of protecting their investment.

Gross Domestic Product (GDP)

Total dollar value of goods/services a country produces within its borders in a year. GDP differs from Gross National Product (GNP), which is the value of all goods and services produced by a country's citizens or organizations

Free trade zones

To ease the financial burden of tariffs on companies that import goods, some countries have established free trade zones. These are designated areas where foreign companies can warehouse goods without paying taxes or customs duties until they move the goods into the marketplace. Encourage others to go into the United states.

Straight Extension

Tobacco products Electronics Cameras Chewing gum

Analyze the External Marketing Environment

Understanding the external environment is essential for marketing in your home country or on a global stage. When entering foreign markets, knowledge of local conditions is critical. Helps you to figure out where to go and what strategies are likely to be most effective

When Is a Bribe Not a Bribe? Ethical Issues for Global Business

Vast differences in what people around the world consider ethical business behavior In many L D C s and developing countries, payment in exchange for "favors" is a way of life. U.S. federal law bans payment to influence decisions by foreign officials to award business contracts.

Planning and the Marketing Plan

Vice presidents or functional directors of areas such as marketing, finance, and human resources usually manage the process of functional planning. We refer to the functional planning that marketers do as market planning. The person in charge of such planning may have the title of director of marketing, vice president of marketing, chief marketing officer, or something similar. Such marketers might set an objective to gain 40 percent of a particular market by successfully introducing three new products during the coming year. This objective is part of a marketing plan. Market planning typically includes both a broad three- to five-year marketing plan to support the firm's strategic plan and a detailed annual plan for the coming year. Because managers gain knowledge through business planning, they can make informed decisions in a changing business environment. Planning ensures that organizations develop objectives and methods to chart their progress toward achieving those objectives—keeping the firm on track toward future success.

Table 2.6 Some Common Ethical Philosophies:

What constitutes ethical behavior is often different for different people. Table 2.6 depicts how various ethical philosophies may guides people's decisions. For example, if one uses utilitarianism as a means of making a decision on different safety features to include in a new product, the ethical choice is the one that provides the most good and the least harm. As another example, the fairness or justice approach suggests that the ethical decision about employee compensation is to pay everyone the same or to be able to justify why one salary is higher than another.

Ethical relativism

What is ethical in one culture is not necessarily the same in another culture

What is meant by "business planning"

What is meant by "business planning". The basic definition is highlighted on this slide. While both large firms like GM and small firms such as a Mom and Pop business should engage in planning, the scope of planning is different. Planning at large firms involves a multitude of individuals at different levels within the firm while planning with a small firm may be undertaken only by the business owner, with relatively little input from others. Still, good planning at any firm should build on the firm's strengths and help managers make informed decisions. Objectives should be taken before action is undertaken. Both the business plan (which includes decisions that guide the entire organization) and marketing plan should be created. Marketing plans describe the marketing environment, outline the marketing objectives and strategy, and identify who will be responsible for carrying out each part of the marketing strategy.

Product adaptation

When a firm offers similar, but modified products in foreign market

What is expropriation

When a government or state takes a foreign-owned asset and reimburses the company, owners and individuals

Extortion

When someone in authority extracts payments under duress

Assigning Responsibility in the Action Plan

Who will be responsible for carrying out each part of the marketing plan? Not everybody involved will be marketers Sales Production Quality control Shipping Customer service Finance IT A marketing plan can't be implemented without people. And not everybody who will be involved in implementing a marketing plan is a marketer. Sales, production, quality control, shipping, customer service, finance, information technology—the list goes on—all will likely have a part in making the plan successful. Individuals who might be listed as responsible for certain actions are the CMO (Chief Marketing Officer) and other corporate level managers.

World Trade

World Trade refers to the flow of goods and services among different countries—the value of all the exports and imports of the world's nations - Not all countries participate equally - Requires flexibility in order to serve needs of remote markets - Countertrade - exchanges services - Unsafe products _____________________________________ In some countries, because sufficient cash or credit is simply not available, trading firms work out elaborate deals in which they trade (or barter) their products with each other or even supply goods in return for tax breaks from the local government. This countertrade accounts for between 20 and 25 percent of all world trade. Our ever-increasing access to products from around the world does have a dark side: The growth in world trade in recent years has been accompanied by a glut of unsafe products—toys with lead paint, toothpaste containing poisonous diethylene glycol, and more recently, crayons laced with cancer-causing asbestos.

Which of the following refers to the total value of all exports and imports of the world's nations?

World trade

Table 2.3 Significant American Legislation Relevant to Marketers (1 of 3)

Yellow - Governs business to business Wheeler-Lea - Advertising. Protects against claims.

Price decisions

You may be surprised to learn that it is often more expensive to manufacture a product IN a foreign market than at home. This is because there are higher costs stemming from transportation, tariffs, differences in currency exchange rates, and the need to source local materials.